The present invention relates to novel 2-carbonyl-3-acyl-1,3-thiazolidines having a &bgr;-amino group on the acyl chain, in free, prodrug form or pharmaceutically acceptable salt thereof, including their enantiomers, diastereomers and racemates, as efficient inhibitors against DPP-IV. The invention further relates to the pharmaceutical compositions comprising the disclosed compounds. The present invention also relates to methods for preparing the disclosed compounds and for treating DPP-IV-mediated diseases.